Commentary
In my opinion, soybeans were led today by a rally in soymeal. Speculation that Managed money funds bought over 10K contracts putting them long approximately 50k contracts. The market is also focusing on South American weather, which continues to offer a dry outlook through much of Southern Brazil through and Northern Argentina over the next few weeks. In my opinion, there has been a very strong unwind of long bean oil, short soymeal positions that had been built for over a year in my view. In early October, we started to bottom in the meal market as that market broke almost 40 percent from the Spring highs, a significant drop. This coincided with the reality that oil stocks had been building, and the demand uptick was being pushed forward. All of this working to cause a potential collapse in oil share,. Again, the major change the past two sessions is that both meal and oil saw open interest increase, after weeks of liquidations. Tomorrow’s National Oilseed Processors Association (NOPA) monthly report is expected to show U.S. processors continued their strong crushing pace in November. Technically in my view In January soymeal, a close above the July high at $391.80 may have bulls targeting the $408.00 level. Support is likely to emerge if the market approaches the $369.00 area, with support then layered down to trendline support near 350.0 in my opinion
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